The first presidential debate of 2020 is already known as a debacle for public discourse. Unfortunately after 200,000+ deaths from Covid-19, America is as divided in grief as it was in prosperity. Already in New York we are seeing a spike in cases as Springtime memories fade. Few still immediately recall the panic of overwhelmed hospitals and empty supermarket shelves. Our ability to adapt to the new normal of social distancing and masks has brought an air of quasi-stability. Unfortunately, in the shadows of caustic Washington rhetoric lies the truth of a crumbling food system and more than 50 million food insecure citizens (including 1 in 7 children).
This past summer, I drove more than 9,000 miles across the United States observing endless crops of corn, wheat, potatoes, grapes, and citrus. While most irrigation systems today are fully automated, there still is a very human element of harvesting. The weakness of the current system which relies heavily on migrant workers and low-income day-laborers became all too apparent with the demands of the coronavirus. At ff Venture Capital, we already understood the opportunities (pre-Covid) of agricultural automation evidenced by our investment in Burro (see previous article). Feeding the nation under the current circumstances requires even higher yields, lower costs and greater originality.
Just as offices have embraced online video, farming is undergoing a revolution with new indoor automated solutions. The latest entry is REEST. out of SOSV’s HAX Accelerator, aiming to bolster fungus output worldwide with its novel robotics. In speaking with the founder and CTO, Denys Kotelovych, he explained to me the epiphany of his startup. Based in the Lviv, Ukraine, Kotelovych’s partner, Petro Shmigelskyi, comes from a family tradition of mushroom farming. “Basically my co-founder’s relatives are owners of a mushroom farm, so he knew about the problems they’re facing. The main problem is the labor, working conditions and quality of the yield. You must harvest mushrooms as soon as they get a needed size, and do it quickly, so they won’t overgrow. It’s kind of a mundane job, you have to decide which one to pick, and at the same time standing on a high shelf in a high humidity and low temperature environment,” explains Kotelovych.
According to the latest statistics, the global mushroom market is projected to exceed $69 billion by 2024. The uptick in fungi is largely driven by a rising level of awareness of the nutritional benefits of mushrooms and the consumption of processed foods. Harnessing the current market spike, the Eastern European entrepreneurs shared their progress in sorting and harvesting spores, “We’re starting by leasing our mushroom harvesting robots to existing mushroom farms, so we could generate revenue and build other types of robots. We put our robots on the shelves, they start to scan the mushroom field, analyzing data, tracking mushrooms and picking those which are ready, on time, producing baskets filled with mushrooms at the side. Eventually, our goal is to build a complete mushroom farming solution, where only thing needed would be growing supplies and mycelium resulting in mushrooms collected into ready-to-sell boxes for the regular consumer.”
In breaking down his inventive solution, the roboticist detailed his proprietary mechatronic system, “We’ve designed our gripper (patent pending ) which works very well specifically for mushrooms, and with our software we can precisely identify those mushrooms which should be picked by using depth cameras and CV [computer vision].” Kotelovych further elaborated how the GRIPPER tackles the biggest challenge of machine harvesting – not destroying the inventory. “It’s important not to damage the mushroom, because people like to see nice and fresh mushrooms, and when you slightly apply too much force to a mushroom it becomes dark, which is not good,” describes the proud inventor.
In addition to building a working prototype, this innovative team will be rolling out its solution in the United States with Basciani Foods, one of the largest mushroom suppliers in the country. The offering aims to provide a 30% cost savings, in addition to increasing the yields substantially. In outlining his business model Kotelovych stated, “We charge $0.2 for 1kg of harvested mushrooms, in comparison to human pickers having about $0.3 + other expenses which the grower should pay for each. So, right now it’s 30% saving, and it’s not only the price, but by using our algorithms we can improve the total amount of yield by carefully choosing an optimal harvesting strategy.” The startup is currently raising capital to build 100 robots over the next 18 months. When I pressed the technologist for his thoughts about future opportunities, he explained, “We have thought about other crops, but the button mushroom industry it’s a vast chunk, so we’re fully focused here for now.”
As the pandemic continues, Kotelovych thinks that it’s an opportune time to solve the labor problem, “Even before Covid, growers struggled with people, and it’s pretty normal, nobody wants to work in such an environment doing mundane and tedious tasks, so yes Covid just showed everyone that this problem should be automated.” He further reflected, “It was so weird for us when we saw how the mushroom industry is labor related, so we instantly saw the robotics opportunities there… I see so many opportunities in farming these days, so my honest opinion is that we’ll see plenty of robots very, very soon.”